Modern Dairy Human Rights Protection Policy

1. Introduction

At Modern Dairy, we are committed to respecting and promoting human rights in our business operations, supply chain and communities. We believe that human rights are the foundation of our vision to create a modern, sustainable, and healthy dairy industry that benefits our customers, employees, shareholders, and society.

2. Scope of Policy

This policy is a public statement of intent and applies to all employees of Modern Dairy and its controlled subsidiaries (including board members, senior management, and security personnel), as well as all suppliers conducting business with Modern Dairy and its subsidiaries, including any security contract suppliers (if any) providing security services to Modern Dairy and its subsidiaries. Furthermore, we encourage and expect business partners with long-term cooperative relationships with the company (partners whose employees are involved in supply chain activities or joint ventures) to adhere to the same human rights and labor standards, working together to improve the working conditions of their employees.

3. Principles

We respect the dignity and diversity of all individuals and treat them with fairness, equality, and non-discrimination.
We do not tolerate harassment, abuse, or violence in our workplace or business relationships.
We respect our employees’ personal freedom and privacy, and protect their personal data.
We respect our employees’ freedom of association and collective bargaining rights, and engage with them through honest and constructive dialogue.

4. Commitments

4.1 Respect for Human Rights

Based on international human rights protection documents and principles, including the “UN Guiding Principles on Business and Human Rights”, the “OECD Guidelines for Multinational Enterprises”, and the “ILO Core Labour Standards”, we make the following commitments:

Prohibition of Forced Labor: We firmly oppose human trafficking, including the recruitment, transportation, transfer, harboring, or receipt of persons for exploitation, whether through threats, use of force, fraud, or deception.
Prohibition of Child Labor: We commit to prohibiting the use of child labor and ensuring that no exploitative child labor exists in our operations and supply chain. We adhere to the International Labour Organization (ILO) regulations on minimum employment age, ensure that children’s right to education is not infringed, and prevent children from engaging in work that is harmful to their physical and mental health.
Guarantee of Freedom of Association: We respect the right of employees to freely form and join trade unions or other organizations, regardless of their background, identity, or position. We support employees in exercising this fundamental right without discrimination or retaliation. 1.5% of employees represented by an independent trade union or covered by collective bargaining agreements in 2024.
Right to Collective Bargaining: We respect the right of employees to freely form and join trade unions, and the right of employees and employers to engage in collective bargaining on working conditions, remuneration, and other related matters.
Elimination of Discrimination: We are committed to eliminating all forms of discrimination in recruitment, remuneration, promotion, and other employment conditions, including discrimination based on race, gender, age, religion, disability, sexual orientation, gender identity, marital status, or other characteristics.
Equal Pay for Equal Work: We firmly implement the principle of equal pay for equal work, adopting a broad-band salary system based on job grading and salary levels, combined with employee job titles, abilities, performance, etc., to ensure that all employees receive equal remuneration for work of equal value.

4.2 Environmental Protection

We are committed to protecting the environment and addressing the challenges of climate change. We adopt sustainable practices in the production, processing, distribution, and consumption of dairy products. We use natural resources effectively and responsibly, reduce waste and emissions, and promote biodiversity. We respect the right of animals to be treated humanely and with care.

4.3 Social Engagement

We respect the rights of local communities and residents to their land, resources, culture, and traditions. We contribute to the social and economic development of the communities where we operate by creating employment opportunities, supporting local businesses, paying taxes, investing in infrastructure, and participating in charitable endeavors and philanthropic projects.

4.4 Security Personnel or Contract Security Suppliers

Modern Dairy requires security personnel or contract security suppliers (if any) to respect the rights and interests of community residents, conduct security work in a human rights-respecting manner, comply with relevant laws, regulations, professional standards, and codes of conduct, regularly participate in human rights protection training provided by Modern Dairy, and are required to resolve potential conflicts responsibly, opposing the use of violence in any dispute.

5. Training

To better implement this policy, we plan to conduct human rights protection training for employees, and the following are our targets, methods, content, etc.

5.1 Targets: Our training targets are to raise the awareness and understanding of all employees on human rights protection, and to enable them to understand the requirements and principles of this Policy, and how to respect and promote human rights in their daily work.

5.2 Methods: We conduct human rights protection training at least once a year, covering all employees. We adopt online training as the form and push the training notice to all employees through the Office Automation (“OA”) Collaborative System. Our human rights protection training requires all employees to participate. After the online training is completed, the training screen recording will be uploaded to the “Niurenhui” learning platform, so that all employees can view and learn at any time. In addition, we will use newsletters or graphic propaganda to convey the policy requirements, precautions, or violations of human rights protection.

5.3 Content: Our training content includes the following aspects:

The basic concepts and international documents of human rights protection, including UN Declaration of Human Rights, as well as the background and purpose of this Policy.
The key contents and principles of this Policy, as well as our specific measures and expectations regarding environmental protection, community engagement, and in particular, guidance for security personnel and contract security providers (if any) on how to interact harmoniously with the community and avoid conflict.
The implementation and supervision mechanism of this Policy, as well as our reporting channels and remedial measures.

6. Human Rights Due Diligence

6.1 Objective

Modern Dairy is committed to establishing a rigorous human rights due diligence system to ensure that the company can comprehensively identify, assess, and effectively manage potential human rights risks in its daily operations, new business expansion (including but not limited to mergers and acquisitions), and throughout its entire value chain. This initiative aims to continuously enhance the company’s human rights performance and solidify its sustainable development capabilities.

6.2 Integration into Company Management System

We will deeply integrate human rights due diligence into the company’s overall governance framework and management system, clarifying the responsibilities and authorities of each department in human rights due diligence to ensure the standardization and systematic nature of this work. The company will regularly conduct internal audits and oversight of the implementation of human rights due diligence to ensure that all measures are effectively carried out.

6.3 Risk Identification and Assessment

We conduct an annual comprehensive human rights risk assessment for the company’s own employees, suppliers, specific vulnerable groups (children, women, migrant workers), and contract security suppliers (if any), to monitor the effectiveness of human rights policies. The assessment focuses on potential risks in areas such as employee recruitment, compensation and benefits systems, workplace safety and health, labor intensity management, equal pay for equal work principles, freedom of association, child labor, collective bargaining rights, discrimination, human trafficking, and forced labor. Simultaneously, we will also review the human rights performance of suppliers. We will prioritize risks based on their potential likelihood and impact, thereby precisely identifying key risk areas and high-risk links.

6.4 Establishment of Communication Mechanisms

Establish open and transparent communication channels with employees, suppliers, customers, communities, and other stakeholders to regularly collect their feedback and opinions on the company’s human rights performance, and to understand potential human rights issues and risks.
Actively participate in human rights exchange activities organized by industry associations, international organizations, etc., and share experiences and best practices with peer companies to jointly promote the progress of human rights protection.

7. Human Rights Risk Mitigation and Remedy Policy

7.1 Development of Preventive Measures

In all operating locations, develop specific, actionable preventive measures and action plans for identified human rights risks, clearly defining responsible persons and timelines.
In the recruitment process, strictly adhere to the principles of fairness, impartiality, and legality, and resolutely eliminate any form of discrimination.
In employee training, strengthen human rights awareness education to enhance all employees’ understanding and comprehension of human rights issues.
Contracts signed with our suppliers will clearly include human rights compliance requirements, clarifying the responsibilities and obligations of both parties regarding human rights, and will be regularly audited and evaluated to ensure their continuous adherence to human rights standards.
Integrate labor management into the scoring criteria of the “Supplier Comprehensive Evaluation Form,” and prioritize the engagement of suppliers with superior labor management performance and higher overall scores.

7.2 Handling of Human Rights Violation Incidents

Disciplinary actions will be taken against violating personnel, such as warnings, demerits, major demerits, demotion, dismissal, termination of employment contracts, etc.
Provide necessary support and assistance to victims, such as psychological counseling, medical assistance, legal aid, etc.
Revise relevant policies and procedures to prevent similar incidents from recurring.
Cooperate with relevant government departments to pursue legal responsibility of violating personnel in accordance with the law.

7.3 Establishment of Remedy Mechanisms

In all operating locations, establish sound human rights complaint and reporting mechanisms to ensure that employees and other stakeholders can conveniently and safely raise human rights issues and complaints.
For human rights issues that have occurred, promptly take effective remedial measures, including compensation for victims, apologies, provision of psychological support, etc., to correct improper behavior in a timely manner and eliminate negative impacts.
Regularly evaluate and provide feedback on the effectiveness of remedial measures, summarize lessons learned, and continuously improve the remedy mechanisms to prevent similar problems from recurring.

7.4 Continuous Improvement

In all operating locations, regularly monitor and evaluate the effectiveness of human rights risk mitigation and remedy measures, and adjust and optimize measures in a timely manner based on actual conditions.
Establish a human rights performance indicator system to quantitatively evaluate and track the company’s human rights performance, integrate human rights performance into the company’s overall performance appraisal system, and incentivize all departments and employees to actively fulfill their human rights responsibilities.
The company will follow up and audit the handling results to ensure the effectiveness and fairness of the handling measures.
At the same time, continuously pay attention to changes in domestic and international human rights laws, regulations, and standards, and promptly adjust the company’s human rights policies and measures to ensure that the company’s human rights management work always meets the latest requirements.

8. Reporting Violations

We encourage all employees, suppliers, contractors, partners, customers, and other stakeholders to report any actual or suspected violations of this policy or any applicable laws and regulations. The company provides multiple confidential reporting channels, allowing stakeholders to submit complaints or reports via phone, email, or other means. We will strictly keep the information of reporters confidential.

Employees: Can directly submit complaints to their immediate supervisor or the head of the relevant Human Resources and Administration Department. The head of the Human Resources and Administration Department will confirm receipt within three working days of receiving the complaint and record the specific content, date, time, and location of the complaint, and submit all records to the Human Resources Department. Complaints and reports can also be submitted directly to the Trade Union, the Discipline Inspection Commission Office, and the Compliance Management Department.
Suppliers, Contractors, and Partners: Can directly contact the Discipline Inspection Commission Office. Our Discipline Inspection Commission Office contact information is posted on bulletin boards near our farms, at farm gates, in cafeterias, and other locations.

Discipline Inspection Commission Office:

Email: jijianjubao@modernfarming.cn
Phone: 18655597719

9. Audit of Human Rights Policy Effectiveness

To ensure the effectiveness of its human rights policy, Modern Dairy has established structured monitoring and evaluation processes. We set clear human rights objectives and regularly report on the progress made towards achieving them. The company will continuously monitor the evolving human rights landscape and best practices and regularly review and update its human rights policy and related procedures to ensure their ongoing applicability and effectiveness.

9.1 New Human Rights Protection Targets for 2024

New Human Rights Protection Targets for 2024	2024 Target Progress：Achieved
1) Employee Human Rights Incident Management Targets
Forced Labor Incidents:0	0 (Achieved)
Child Labor Incidents:0	0 (Achieved)
Human Rights-Related Complaint Resolution Rate: 100%	100% (Achieved)
2) Employee Human Rights Training Targets
Employee Human Rights Training Coverage Rate: 100%	100% (Achieved)
3) Employee Satisfaction Targets
Business Module Survey Coverage for Human Rights Policy Satisfaction: 100%	100% (Achieved)
Employee Satisfaction with Human Rights Training: ≥ 90%	99.8% (Achieved)
Employee Agreement with Company Human Rights Policy: ≥ 90%	99.7% (Achieved)
Employee familiarity with human rights knowledge: ≥ 90%	99.7% (Achieved)
4) Community Human Rights Protection Targets:
Resolution Rate for Human Rights Complaints from the Community Related to Company Operations (including receipt, investigation, and resolution of complaints): 100%	100% (Achieved)
Community Violence Incidents Caused by Company Employees: 0	0 (Achieved)

9.2 Human Rights Protection Targets for 2025

Human Rights Protection Targets for 2025	2025 Target Progress
1) Employee Human Rights Incident Management Targets
Forced Labor Incidents: 0	In Progress
Child Labor Incidents: 0
Human Rights-Related Complaint Resolution Rate: 100%
2) Employee Human Rights Training Targets
Employee Human Rights Training Coverage Rate: 100%	In Progress
3) Employee Satisfaction Targets
Business Module Survey Coverage for Human Rights Policy Satisfaction: 100%	In Progress
Employee Satisfaction with Human Rights Training: ≥ 90%
Employee Agreement with Company Human Rights Policy: ≥ 90%
Employee familiarity with human rights knowledge: ≥ 90%
4) Community Human Rights Protection Targets:
Resolution Rate for Human Rights Complaints from the Community Related to Company Operations (including receipt, investigation, and resolution of complaints): 100%	In Progress
Community Violence Incidents Caused by Company Employees: 0	In Progress